Flame Acquisition Corp. *

PROPOSED BUSINESS COMBINATION: Sable Offshore Corp.

ENTERPRISE VALUE: $1.001 billion

ANTICIPATED SYMBOL: tbd

Flame Acquisition Corp. proposes to combine with Sable Offshore Corp.

• Sable has separately agreed to acquire oil and gas assets as part of the merger.
• After giving effect to the business combination, the company will be named Sable Offshore Corp.

SUBSEQUENT EVENT – 10/4/24 – LINK

• Sable Offshore Corp. Announces Redemption of Public Warrants through a cashless exercise.
  • At 5:00 p.m. New York City time on October 31, 2024, the Public Warrants will cease trading on the New York Stock Exchange.

SUBSEQUENT EVENT – 2/12/24 – LINK

• Flame and Holdco previously entered into Subscription Agreements for a $520 million PIPE Investment with investors to purchase 52 million shares at $10 each upon the Business Combination.
• After the Special Meeting on February 12, 2024, one PIPE Investor that subscribed for $125 million, informed the Company that it would not be able to fund that subscribed amount by the closing of the Business Combination due to capital call issues.
• The Company secured additional PIPE Investments (including an additional $25 million commitment from James C. Flores, the Chairman and CEO) on substantially the same terms as those contained in the Subscription Agreements to replace, in the aggregate, $53 million of the amount previously committed by the PIPE Investor described above.
• Flame may not be able to obtain additional funds to account for such shortfall in the PIPE investment, on favorable terms or at all, and any financing shortfall would reduce the amount of funds that New Sable has available following the Closing.
• The total PIPE now adds up to 43,789,500 Shares ($437,895,000 million)

SUBSEQUENT EVENT – 1/16/24 – LINK

• On January 12, 2024, Holdco amended its Initial and Additional PIPE Subscription Agreements, increasing the total commitment to $71,950,000 and the maximum number of Class B shares to be sold from 40,000,000 to 52,500,000.
• On January 12, 2024, Holdco signed new Additional Holdco PIPE Subscription Agreements with new investors, agreeing to sell 16,505,000 Class B shares at $10.00 each, totaling approximately $165,050,000. This brings the total commitments from Additional Holdco PIPE Investors to 34,850,000 Class B shares at the same price, amounting to approximately $348,500,000.
• On January 12, 2024, Flame entered into Flame PIPE Subscription Agreements with investors to sell 10,000,000 shares of Flame Common Stock at $10.00 per share, totaling $100,000,000.
  • Flame must file a registration statement within 30 days post-Merger for the resale of shares issued to Flame PIPE Investors.
    • The statement should be effective within 90 days (or 120 days if reviewed by the SEC), or within 10 business days after being informed by the SEC that there will be no or no further review.
• Flame is responsible for maintaining and ensuring the effectiveness of the registration statement.
• Closings under Flame PIPE Subscription Agreements are expected to coincide with the Merger’s consummation, subject to customary conditions.
• The Agreements will terminate if the Purchase and Sale Agreement among Exxon Mobil Corporation, Mobil Pacific Company, and Sable is terminated, the Merger Agreement is terminated, or if the closing hasn’t occurred by March 1, 2024.

SUBSEQUENT EVENT – 12/18/23 – LINK

• The SPAC entered into subscription agreements with certain investors (such investors, the “Additional Sable PIPE Investors” and, together with the Initial Sable PIPE Investors, the “Sable PIPE Investors”), pursuant to which the Additional Sable PIPE Investors agreed to purchase, in the aggregate, 18,045,000 Holdco Class B shares at a price of $10.00 per share, for an aggregate commitment amount of approximately $180,450,000.

EXTENSION – 8/31/23 – LINK

• The SPAC approved the extension from September 1, 2023 to March 1, 2024.
  • 2,328,063 shares were redeemed at the meeting for $10.31/Share
  • The Sponsor will not contribute funds into the trust account

SUBSEQUENT EVENT – 8/3/23 – LINK

• On July 31, 2023, Holdco entered into a substantially similar Subscription Agreement Amendment with the remaining Sable PIPE Investor, representing an aggregate commitment amount of $10,000,000.
  • As a result, all of the Sable PIPE Investors, representing aggregate commitments of $74,500,000, have executed Subscription Agreement Amendments.

EXTENSION – 3/1/23 – LINK

• The SPAC approved the extension from March 1, 2023 to September 1, 2023
  • 20,317,255 shares were redeemed at the meeting for $10.15/Share
  • The Sponsor will not contribute funds into the trust account

TRANSACTION

• At the closing of the Business Combination (the “Closing”), on the terms and subject to the conditions of the Merger Agreement:
  • At the effective time of the Holdco Merger, all of the limited liability company membership interests in Holdco designated as Class A shares issued and outstanding will be converted into the right to receive 3,000,000 shares of Class A common stock of Flame.
  • Each Holdco Class A share held in treasury or owned by Flame will be canceled and no consideration will be delivered in exchange for those shares

Updated Transaction Overview

Announcement Transaction Overview

PIPE

• Holdco entered into subscription agreements with certain investors, pursuant to which the Sable PIPE Investors agreed to purchase, in the aggregate, 7,150,000 limited liability company membership interests in Holdco designated as Class B shares at $10.00 per share, for an aggregate commitment amount of approximately $71,500,000 (the “Sable PIPE Investment”).
• On July 31, 2023, Holdco entered into a substantially similar Subscription Agreement Amendment with the remaining Sable PIPE Investor, representing an aggregate commitment amount of $10,000,000.
  • As a result, all of the Sable PIPE Investors, representing aggregate commitments of $74,500,000, have executed Subscription Agreement Amendments.
• Amended PIPE
  • On January 12, 2024, Holdco amended its Initial and Additional PIPE Subscription Agreements, increasing the total commitment to $71,950,000 and the maximum number of Class B shares to be sold from 40,000,000 to 52,500,000.
  • On January 12, 2024, Holdco signed new Additional Holdco PIPE Subscription Agreements with new investors, agreeing to sell 16,505,000 Class B shares at $10.00 each, totaling approximately $165,050,000. This brings the total commitments from Additional Holdco PIPE Investors to 34,850,000 Class B shares at the same price, amounting to approximately $348,500,000.
  • On January 12, 2024, Flame entered into Flame PIPE Subscription Agreements with investors to sell 10,000,000 shares of Flame Common Stock at $10.00 per share, totaling $100,000,000.
• Amended PIPE 2/12/24
  • Flame and Holdco entered into Subscription Agreements for a $520 million PIPE Investment with investors to purchase 52 million shares at $10 each upon the Business Combination.
    • After filing a proxy statement on January 31, 2024, for a Special Meeting, one PIPE Investor failed to fund its $125 million commitment due to capital call issues on February 12, 2024.
    • However, the Company secured an additional $53 million in PIPE Investments, including $25 million from Chairman and CEO James C. Flores, to cover the shortfall.
    • Flame seeks further investments to ensure liquidity post-Merger, aiming to meet the $150 million minimum cash threshold and complete the Closing with sufficient operational capital.
    • The total PIPE now added up to 43,789,500 Shares ($437,895,000 million)

LOCK-UP

Company:

• The holders of Holdco Class A shares immediately prior to the effective time of the Holdco Merger will agree to a lock-up on their shares of Flame Class A common stock, pursuant to which such parties will agree to not transfer shares of Flame Class A common stock held by such parties for a period of three years following the Closing.

Sponsor:

• Shares held by the Sponsor will be locked up for a period of 12 months or until a VWAP of $12.00 is reached for a period of 20 out of 30 trading days.

NOTABLE CONDITIONS TO CLOSING

• The obligation of each of Flame and Sable to consummate the Merger is subject to certain closing conditions including Flame having at least $5,000,001 of net tangible assets remaining after giving effect to the redemption of shares of Flame common stock pursuant to the redemption rights of Flame public stockholders and after receipt of the proceeds under the PIPE Subscription Agreements.
• The Company will have no less than $150.0 million of available cash (as defined in the Sable-EM Purchase Agreement) at the Closing (Sable-EM Minimum Cash Threshold).

NOTABLE CONDITIONS TO TERMINATION

• The Merger Agreement may be terminated at any time prior to the Closing by either Flame or Sable if the Closing has not occurred on or prior to June 30, 2023. [The Outside Date was amended from 6/30/23 to 3/1/24 – Link]
• Or by either Flame or Sable if the consummation of the Merger is permanently enjoined, prevented, prohibited or made illegal by the terms of a final, non-appealable governmental order or other law

ADVISORS

• Petrie Partners Securities, LLC is serving as financial advisor to the board of directors of Flame.
• Cowen and Company, LLC, Intrepid Partners, LLC, and Jefferies LLC are serving as joint financial advisors to Sable.
• Cowen, Intrepid and Jefferies are serving as joint placement agents in connection with the Sable PIPE Investment.
• Latham & Watkins LLP is serving as legal counsel to Flame.
• Bracewell LLP is serving as legal counsel to Sable.
• Kirkland & Ellis LLP is serving as legal counsel to Cowen, Intrepid and Jefferies.

MANAGEMENT & BOARD

Executive Officers

James C. Flores, 61
Chairman, Chief Executive Officer, and President

From May 2017 until February 2021, Mr. Flores served as President, Chief Executive Officer and Chairman of Sable Permian Resources, which engaged in the acquisition, consolidation and optimization of oil and gas upstream opportunities. Sable Permian Resources filed a voluntary petition for bankruptcy on June 25, 2020 and emerged from bankruptcy on February 1, 2021. Prior to Sable Permian Resources, Mr. Flores served as Vice Chairman of Freeport-McMoRan, Inc. and CEO of Freeport-McMoRan Oil & Gas, a wholly owned subsidiary of Freeport-McMoRan Inc., the world’s largest publicly traded copper producer, from June 2013 until April 2016. From 2001 until 2013, Mr. Flores was the Chairman, CEO and President of Plains Exploration & Production Company and Chairman and CEO of Plains Resources Inc. From 1994 until 2000, Mr. Flores was also the Chairman and CEO of Flores & Rucks, Inc. which, after several acquisitions, was later renamed Ocean Energy Inc. prior to its sale to Devon Energy Corporation. Since 1982, Mr. Flores has had an extensive career in the oil and gas industry in the roles of Chairman, Chief Executive Officer, and President of four public and one private oil & gas exploration and production companies. He serves on the board of directors of Colonnade Acquisition Corp., is a member of the National Petroleum Council, serves as Trustee for the Baylor College of Medicine and is a Director for the Waterfowl Research Foundation. He was recognized as Executive of the Year in 2004 in Oil and Gas Investor magazine. Mr. Flores received a B.S. degree in corporate finance and petroleum land management from Louisiana State University.

---

Gregory D. Patrinely, 35
Chief Financial Officer and Secretary

From June 2018 until February 2021, Mr. Patrinely served as Executive Vice President and Chief Financial Officer of Sable Permian Resources, which engaged in the acquisition, consolidation and optimization of oil and gas upstream opportunities. Sable Permian Resources filed a voluntary petition for bankruptcy on June 25, 2020 and emerged from bankruptcy on February 1, 2021. Mr. Patrinely previously served as Treasurer for Sable Permian Resources, from May 2017 to June 2018, where he oversaw the financial analysis and execution of refinancing, restructuring and acquisition efforts. Prior to Sable Permian Resources, Mr. Patrinely was a Manager in the Acquisitions & Divestments Group of Freeport-McMoRan Oil & Gas, a wholly owned subsidiary of Freeport-McMoRan Inc., from May 2015 to May 2017, where he managed the execution of financings, mergers, acquisitions and divestments. Mr. Patrinely holds a B.S. degree in Economics with Financial Applications and a B.A. degree in English, with Honors, from Southern Methodist University.

---

Board of Directors

Michael E. Dillard, 62
Director

Mr. Dillard was a partner with the law firm of Latham & Watkins LLP from January 2010 until January 2021. He was a founding partner of the Houston, Texas office of Latham & Watkins LLP, serving as the Houston Office Managing Partner from January 2010 through March 2015. Mr. Dillard was Global Practice Group Chair of Mergers and Acquisitions for Latham & Watkins LLP from March 2018 until January 2021. Mr. Dillard has been involved in M&A transactions valued in excess of $250 billion. Mr. Dillard is the Vice Chair of the Board of Trustees of Cristo Rey College Preparatory School of Houston, a high school which offers a rigorous college preparatory education to students from low-income families in the Houston area. Mr. Dillard received a B.A. degree in Mathematics from Southern Methodist University in 1979 (summa cum laude) and a Juris Doctor degree from Southern Methodist University Dedman School of Law in 1982 (cum laude).

---

Gregory P. Pipkin, 61
Director

Since November 2016, he has been a Senior Managing Director with the investment and advisory firm of NRI Energy Partners. Prior to NRI Energy Partners, Mr. Pipkin served as the co-head and Managing Director of the Houston office of the Barclays Natural Resources Group for Barclays PLC, from September 2008 to November 2016. Mr. Pipkin is a board member of Family Legacy Missions International, a mission in Lusaka, Zambia that educates and feeds impoverished and orphaned children. Mr. Pipkin also serves on the board of Morningstar Partners LP, an oil and gas producer primarily in the central basin platform in the Permian basin, Texas. Mr. Pipkin received a B.S. degree in chemical engineering and an M.B.A. degree in Business Administration from the University of Texas at Austin.

---

Christopher B. Sarofim, 57
Director 

Mr. Sarofim is the Vice Chairman and a member of the Board of Directors of Fayez Sarofim & Co., an SEC-registered investment advisory firm based in Houston, Texas. Mr. Sarofim joined the firm in 1988 and has been a member of its Board since August 2014. Additionally, he serves on the firm’s Executive, Finance and Investment Committees. Mr. Sarofim shares portfolio management responsibilities for numerous separate accounts advised by the firm and is a co-manager of several mutual funds Fayez Sarofim & Co. sub-advises for BNY Mellon. Prior to joining Fayez Sarofim & Co., he was employed with Goldman Sachs & Co. LLC in corporate finance. In addition to his work at Fayez Sarofim & Co., Mr. Sarofim serves on the boards of Kemper Corp. (NYSE: KMPR), Highland Resources Inc. and Wood Partners. Mr. Sarofim is a member of the Board of Trustees of The Brown Foundation, Inc., St. John’s School, Baylor College of Medicine, and serves on the MD Anderson Cancer Center Board of Visitors. Mr. Sarofim received an A.B. degree in History from Princeton University in 1986.

---